"AI, of course, is also going to play a pivotal role in how work gets done. With the power of our R&D engine and more than 20 years worth of data, we have incredible competitive advantages in the AI era. And we're not just marketing AI, we're shipping it."
— Mike Cannon-Brookes
03Detailed Report
TEAM
Company TEAM
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 19, 2026
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Executive Summary
Summary of key developments for investors in Q1 FY2025: Atlassian posted revenue of $1.188 billion, with cloud revenue up 31% year over year and ongoing momentum from migrations to the Atlassian Cloud Platform. The company reiterated a two-pronged AI strategy: (1) enhancing existing cloud products with Atlassian Intelligence and (2) launching Rovo, a purpose-built AI-powered standalone product. Usage of Atlassian Intelligence has increased more than 10x since the start of the year, and Rovo has reached general availability, driving higher-value editions and cloud migrations. Management emphasized that AI is accelerating customer velocity and ROI, while cloud migrations and enterprise expansion remain core growth levers.
Despite solid top-line progress, Q1 results reflect ongoing profitability pressures from elevated R&D and SG&A investments, resulting in a GAAP net loss of $123.8 million and negative operating income of $31.98 million. Free cash flow was positive at $74.3 million, and Atlassian remains financially robust with cash, cash equivalents and short-term investments totaling about $2.22 billion and a net cash position (net debt) of approximately -$810.6 million. The balance sheet is healthy with total assets of roughly $4.99 billion and total stockholders’ equity of about $1.03 billion. The quarter showcased strong customer and product momentum (55k Jira Service Management customers; 524 customers with >$1 million ARR), as well as progress on enterprise GTM initiatives and AI-driven product innovation. Going forward, management signaled a conservative but constructive outlook, highlighting the importance of data-center migrations to cloud, continued cloud growth, and monetization of Rovo as adoption scales.
Key Performance Indicators
Revenue
Increasing
1.19B
QoQ: 4.97% | YoY: 21.48%
Gross Profit
Increasing
970.16M
81.68% margin
QoQ: 6.54% | YoY: 21.31%
Operating Income
Decreasing
-31.98M
QoQ: 49.83% | YoY: -69.47%
Net Income
Decreasing
-123.77M
QoQ: 37.15% | YoY: -288.20%
EPS
Decreasing
-0.48
QoQ: 36.84% | YoY: -300.00%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $1,187.8 million (+21.5% YoY, +5.0% QoQ). YoY growth driven by Cloud and subscription-based services, with cloud specifically up 31% YoY as reported by management.
Operating Income: -$31.98 million, Operating Margin: -2.69%. YoY change: -69.5%; QoQ improvement of about 49.8% driven by sequential cost discipline and revenue mix.
Net Income: -$123.77 million, Net Margin: -10.42%. YoY: -288.2%; QoQ: +37.2% (benefit from operating leverage and cost controls in tax and other line items).
Cash Flow and Balance Sheet:
- Operating Cash Flow: $80.49 million; Free Cash Flow: $74.34 million; FCF Margin ~6.2%.
- Net cash provided by operating activities: $80.49 million; Net change in cash: -$121.39 million.
- Cash and cash equivalents: $2.0557 billion; Short-term investments: $161.40 million; Total cash & equivalents: $2.2170 billion.
- Total debt: $1.2449 billion; Net debt (cash position): -$810.6 million (net cash).
- Balance sheet: Total assets $4.9933 billion; Total liabilities $3.9645 billion; Total stockholders’ equity $1.0288 billion.
Key business metrics and mix:
- Cloud revenue growth (YoY): 31% (management-reported).
- JSM customers >55,000; >$1M ARR customers: 524.
- Data-center migrations contributing to cloud growth (multi-year tailwind) discussed by management.
- Rovo and Atlassian Intelligence: usage up >10x since year start; Rovo now generally available; Rovo revenue included in cloud results; FY25 monetization guided as modest initially.
Commentary takeaway: Atlassian’s Q1 2025 results underscore robust cloud adoption and AI-driven product innovations, with meaningful multi-product cross-sell and migration momentum. The firm continues to invest aggressively in R&D and go-to-market transformation to scale ARR, particularly within the enterprise segment, while maintaining a strong balance sheet and positive free cash flow.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.19B
21.48%
4.97%
Gross Profit
970.16M
21.31%
6.54%
Operating Income
-31.98M
-69.47%
49.83%
Net Income
-123.77M
-288.20%
37.15%
EPS
-0.48
-300.00%
36.84%
Key Financial Ratios
Gross Profit Margin
Excellent
81.70%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Weak
-0.03%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.10%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.02%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.12%
Return on equity suggests inefficient capital allocation
Current Ratio
Adequate
1.18
Current ratio meets minimum requirements but limited cushion
Debt to Equity
High Risk
1.21
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Negative
-83.56x
Negative earnings make P/E ratio not meaningful
Price to Book
High Premium
40.21x
Very high premium suggests asset-light business model or lofty expectations
Management Insights Available for Members
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